29 U.S. Code § 1103 - Establishment of trust

Except as provided in subsection (b) of this section, all assets of an employee benefit plan shall be held in trust by one or more trustees. Such trustee or trustees shall be either named in the trust instrument or in the plan instrument described in section
1102(a) of this title or appointed by a person who is a named fiduciary, and upon acceptance of being named or appointed, the trustee or trustees shall have exclusive authority and discretion to manage and control the assets of the plan, except to the extent that—

(1)the plan expressly provides that the trustee or trustees are subject to the direction of a named fiduciary who is not a trustee, in which case the trustees shall be subject to proper directions of such fiduciary which are made in accordance with the terms of the plan and which are not contrary to this chapter, or

(2)authority to manage, acquire, or dispose of assets of the plan is delegated to one or more investment managers pursuant to section
1102(c)(3) of this title.

(b) Exceptions

The requirements of subsection (a) of this section shall not apply—

(1)to any assets of a plan which consist of insurance contracts or policies issued by an insurance company qualified to do business in a State;

(2)to any assets of such an insurance company or any assets of a plan which are held by such an insurance company;

(3)to a plan—

(A)some or all of the participants of which are employees described in section
401(c)(1) of title
26; or

(B)which consists of one or more individual retirement accounts described in section
408 of title
26;

to the extent that such plan’s assets are held in one or more custodial accounts which qualify under section
401(f) or
408(h) of title
26, whichever is applicable.

(4)to a plan which the Secretary exempts from the requirement of subsection (a) of this section and which is not subject to any of the following provisions of this chapter—

(A)part 2 of this subtitle,

(B)part 3 of this subtitle, or

(C)subchapter III of this chapter; or

(5)to a contract established and maintained under section
403(b) of title
26 to the extent that the assets of the contract are held in one or more custodial accounts pursuant to section
403(b)(7) of title
26.

(6)Any plan, fund or program under which an employer, all of whose stock is directly or indirectly owned by employees, former employees or their beneficiaries, proposes through an unfunded arrangement to compensate retired employees for benefits which were forfeited by such employees under a pension plan maintained by a former employer prior to the date such pension plan became subject to this chapter.

(c) Assets of plan not to inure to benefit of employer; allowable purposes of holding plan assets

(1)Except as provided in paragraph (2), (3), or (4) or subsection (d) of this section, or under sections
1342 and
1344 of this title (relating to termination of insured plans), or under section
420 of title
26 (as in effect on July 6, 2012), the assets of a plan shall never inure to the benefit of any employer and shall be held for the exclusive purposes of providing benefits to participants in the plan and their beneficiaries and defraying reasonable expenses of administering the plan.

(2)

(A)In the case of a contribution, or a payment of withdrawal liability under part 1 of subtitle E of subchapter III of this chapter—

(i)if such contribution or payment is made by an employer to a plan (other than a multiemployer plan) by a mistake of fact, paragraph (1) shall not prohibit the return of such contribution to the employer within one year after the payment of the contribution, and

(ii)if such contribution or payment is made by an employer to a multiemployer plan by a mistake of fact or law (other than a mistake relating to whether the plan is described in section
401(a) of title
26 or the trust which is part of such plan is exempt from taxation under section
501(a) of title
26), paragraph (1) shall not prohibit the return of such contribution or payment to the employer within 6 months after the plan administrator determines that the contribution was made by such a mistake.

(B)If a contribution is conditioned on initial qualification of the plan under section
401 or
403(a) of title
26, and if the plan receives an adverse determination with respect to its initial qualification, then paragraph (1) shall not prohibit the return of such contribution to the employer within one year after such determination, but only if the application for the determination is made by the time prescribed by law for filing the employer’s return for the taxable year in which such plan was adopted, or such later date as the Secretary of the Treasury may prescribe.

(C)If a contribution is conditioned upon the deductibility of the contribution under section
404 of title
26, then, to the extent the deduction is disallowed, paragraph (1) shall not prohibit the return to the employer of such contribution (to the extent disallowed) within one year after the disallowance of the deduction.

(3)In the case of a withdrawal liability payment which has been determined to be an overpayment, paragraph (1) shall not prohibit the return of such payment to the employer within 6 months after the date of such determination.

(d) Termination of plan

(1)Upon termination of a pension plan to which section
1321 of this title does not apply at the time of termination and to which this part applies (other than a plan to which no employer contributions have been made) the assets of the plan shall be allocated in accordance with the provisions of section
1344 of this title, except as otherwise provided in regulations of the Secretary.

(2)The assets of a welfare plan which terminates shall be distributed in accordance with the terms of the plan, except as otherwise provided in regulations of the Secretary.

This chapter, referred to in subsecs. (a)(1) and (b)(4), (6), was in the original “this Act”, meaning Pub. L. 93–406, known as the Employee Retirement Income Security Act of 1974. Titles I, III, and IV of such Act are classified principally to this chapter. For complete classification of this Act to the Code, see Short Title note set out under section
1001 of this title and Tables.

Subsec. (b)(3). Pub. L. 101–239, § 7894(e)(3), redesignated cls. (i) and (ii) as subpars. (A) and (B), respectively, struck out “, to the extent that such plan’s assets are held in one or more custodial accounts which qualify under section
401(f) or
408(h) of title
26, whichever is applicable” before the semicolon in subpar. (B), and inserted concluding provision “to the extent that such plan’s assets are held in one or more custodial accounts which qualify under section
401(f) or
408(h) of title
26, whichever is applicable.”

Subsec. (c)(2)(A). Pub. L. 101–239, § 7894(e)(1)(A), in introductory provisions, made technical amendment to reference to part 1 of subtitle E of subchapter III of this chapter to correct reference to corresponding part of original Act, requiring no change in text, and in cls. (i) and (ii), inserted “if such contribution or payment is” before “made by an employer”.

Subsec. (c)(3), (4). Pub. L. 101–239, § 7881(k), redesignated par. (4) as (3) and struck out former par. (3) which read as follows: “In the case of a contribution which would otherwise be an excess contribution (as defined in section
4979(c) of title
26) paragraph (1) shall not prohibit a correcting distribution with respect to such contribution from the plan to the employer to the extent permitted in such section to avoid payment of an excise tax on excess contributions under such section.”

1987—Subsec. (c)(2)(B). Pub. L. 100–203, § 9343(c)(1), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: “If a contribution is conditioned on qualification of the plan under section
401,
403(a), or
405(a) of title
26, and if the plan does not qualify, then paragraph (1) shall not prohibit the return of such contributions to the employer within one year after the date of denial of qualification of the plan.”

Subsec. (c)(2)(A). Pub. L. 96–364, § 410(a), substituted provisions relating to contributions or payments of withdrawal liability under part 1 of subtitle E of subchapter III of this chapter made by an employer to a plan by a mistake of fact, and by an employer to a multiemployer plan by a mistake of fact or law, for provisions relating to contributions made by an employer by a mistake of fact.

Amendment by Pub. L. 106–170applicable to qualified transfers occurring after Dec. 17, 1999, see section 535(c)(1) ofPub. L. 106–170, set out as a note under section
420 of Title
26, Internal Revenue Code.

Effective Date of 1990 Amendment

Amendment by Pub. L. 101–508applicable to qualified transfers under section
420 of title
26 made after Nov. 5, 1990, see section 12012(e) ofPub. L. 101–508, set out as a note under section
1021 of this title.

Effective Date of 1989 Amendment

Amendment by section 7881(k) ofPub. L. 101–239effective, except as otherwise provided, as if included in the provision of the Pension Protection Act, Pub. L. 100–203, §§ 9302–9346, to which such amendment relates, see section 7882 ofPub. L. 101–239, set out as a note under section
401 of Title
26, Internal Revenue Code.

Amendment by section 7891(a)(1) ofPub. L. 101–239effective, except as otherwise provided, as if included in the provision of the Tax Reform Act of 1986, Pub. L. 99–514, to which such amendment relates, see section 7891(f) ofPub. L. 101–239, set out as a note under section
1002 of this title.

Section 7894(e)(1)(B) ofPub. L. 101–239provided that: “The amendments made by subparagraph (A) [amending this section] shall take effect as if included in section 410 of the Multiemployer Pension Plan Amendments Act of 1980 [Pub. L. 96–364].”

Amendment by section 7894(e)(3) ofPub. L. 101–239effective, except as otherwise provided, as if originally included in the provision of the Employee Retirement Income Security Act of 1974, Pub. L. 93–406, to which such amendment relates, see section 7894(i) ofPub. L. 101–239, set out as a note under section
1002 of this title.

Amendment by section 410(a) ofPub. L. 96–364effective Jan. 1, 1975, except with respect to contributions received by a collectively bargained plan maintained by more than one employer before Sept. 26, 1980, see section 410(c) ofPub. L. 96–364, set out as a note under section
401 of Title
26, Internal Revenue Code.

Regulations

Secretary authorized, effective Sept. 2, 1974, to promulgate regulations wherever provisions of this part call for the promulgation of regulations, see sections
1031 and
1114 of this title.

Applicability of Amendments by Subtitles A and B of Title I of Pub. L. 109–280

For special rules on applicability of amendments by subtitles A (§§ 101–108) and B (§§ 111–116) of title I of Pub. L. 109–280to certain eligible cooperative plans, PBGC settlement plans, and eligible government contractor plans, see sections 104, 105, and 106 ofPub. L. 109–280, set out as notes under section
401 of Title
26, Internal Revenue Code.